Types of Automobile Tax Deduction
There are two kinds of automobile tax deduction available under the federal law in the US. The first is for those automobiles that qualify as clean fuel vehicles and gasoline-electric hybrids. The second is for automobiles that are donated to charitable organizations.
Owners of the clean fuel vehicles can receive a one-time tax deduction up to $2,000 while owners of electric vehicles can get a one-time tax credit of $4,000. The IRA describes the clean fuel vehicles as those that are run on Natural gas, Liquefied natural gas (LNG), Liquefied petroleum gas (LPG), Hydrogen, Electricity (like gasoline/electric hybrids) and any other fuel that is at least 85% alcohol or ether (like E85).
